Quality of startups graduating from accelerators in MENA remains a serious concern, says Faith Capit
Abdulaziz Alloughani, the Managing Partner with Kuwait-based VC firm Faith Capital tweeted earlier this week, saying, “Despite a plethora of early stage activities in the MENA region (co-working spaces, incubators, accelerators, private/public funding, mentoring, etc), the quality of startups graduating from many of these programs remain a serious concern.”
The tweet immediately caught attention of many in the ecosystem with a lot of people sharing their thoughts about the subject. We also shared the tweet on our social media channels to learn what people think of it. Majority seems to have resonated with concerns with the former Managing Partner of Kuwait’s Talabat.
He later that day explained the problem in detail pointing out different underlying issues, “Plenty of developmental money being poured into the ecosystem; this is not commercial money with no clear/measurable national KPIs or target RoI.”
Abdulaziz suggested that accelerators should focus more on quality instead of having quantity as a key performance indicator which is the case with different programs across the region. He went on to add that accelerators should not be treated as NGOs.
The Kuwaiti VC also took a dig at the wannabes.
“We don’t need case studies to fill in college courses, we don’t need articles to post on the web/magazines, we don’t need stories to tell on a podcast or on the news, we don’t need wannabes telling entrepreneurs what to do. We need real entrepreneurs to start being more active in the community without spreading themselves too thin. We need real life experiences and learnings to be shared first-hand. We need founders to be more forward in sharing their experiences with managers publicly.
We also scanned through the responses to the tweet and the comments on MENAbytes Facebook post and people had a lot to say. Here are some of the responses.
Haider Al-Mosawi, co-founder of Kuwait-based startup hub Sirdab Lab, getting inspired from the tweet, created a complete Twitter thread, to share his thoughts about how accelerators in MENA can actually enhance quality of the startups. It has been published as an article on MENAbytes and you can read it here.
Tarek Fahim, the Managing Partner with Endure Capital, in spite of not being very happy with the current state is optimistic about the future, “Current state is far from perfect, but the trend is moving upward and onward. This is what really matters. Successful startups are scalable and fast growing, ecosystems are not.”
Ibrahim H. Al-Zararee, an Iraqi entrepreneur blames the culture of copying Silicon Valley experience in the region for these problems, “Because we are still trying to copy the Silicon Valley experience here in the MENA region without taking into consideration the fact that the situation here is completely different and that our market needs are not the same.”
Hani W. Naguib, founder of a Cairo-based business consultancy, blames lack of accountability , we have loads free money. VCs have free money and wanapreneurs have free money. No repercussions for their spending. We need builders and creators to make an ecosystem happen. Most VCs are currently mostly creating Facebook accomplishments (pretendups not startups) and waiting for that one company that will boom. This is nothing more than Russian roulette. And it’s finally starting to show. Builders and creators.
Rola Fayyad, founder of Amman-based travel startup Friendture, thinks that the curriculum of these acceleration programs are the main reason for their ineffectiveness, “The programs are not tailored, most startups graduate with low expectations and barely any advantage due to poor curriculum. If we want to copy SV method, let’s copy and implement it right.”
“The only acceleration program I benefited from was Oasis 500, the team supported me with my pivot for Challenge 22,” she later clarified, speaking to MENAbytes.
Abdullah Altamami, the Head of Investments with Saudi’s iNet, sharing his opinion, said, “The true drivers of a startup ecosystem are mostly economic, while the above mentioned (ref. to accelerators, incubators and co-working spaces) are support pillars if the drivers exist. To understand what’s holding it back, look at the financial incentives to start a company vs. working for an established one. We’re not there yet.”
Abbas Hijazi, CEO of a Dubai-based investment management company, It is a scale and quantity of participants issues. Startups have a high failure and low quality rates in general. In US, because of well developed and large market you see the cream. In MENA I think the problem is serious lack of technology expertise and management plus lack of scale and difficulty of growing beyond local country.
Charlotte Gossage, founder of an early-stage hospitality startup in Dubai, shared a very interesting perspective, “I am an early stage startup, currently testing in Dubai. I am helping solve a genuine problem. I chose not to go with an incubator or accelerator, instead completely immersing myself in hotels (my industry) constantly listening, observing, learning, asking. It’s working for me.”
Mahmoud Gao, founder of a Dubai-based fashion startup that graduated from 500 Startups MENA accelerator earlier this year thinks that 500 could help by running an ‘accelerator for accelerators’ to share the best practices.
Our friends at Bahrain’s Startup MGZN also expressed their thoughts, “Quality startups are a statistical improbability, as are the very few global startups who have made it. There needs to be growing volume in order to increase the probability of quality startups to cut through. To grow volume, increased activity needs to take place throughout the ecosystem. Failing is perhaps a slow process in this region, startups can’t fail fast enough to move onto the next thing and try again.”
Many also labelled the entire incubator and accelerator landscape a PR exercise.
It is interesting to know different perspectives coming from those who are part of the ecosystem in one way or the other.
Here’s to hoping that it actually (in some way) contributes to the betterment of the programs in question.